Rolfe Company (a U.S.-based company) has a subsidiary in Nigeria where the local currency unit is the naira (NGN). On December 31,2019, the subsidiary had the following balance sheet (amounts are in thousands [000s]):CashInventoryLandBuildingAccumulated depreciation201120132020Feb. 1 Paid 8,120,000 NGN on the note payable.May 1 Sold entire inventory for 17,200,000 NGN on account.June 1 Sold land for 6,120,000 NGN cash.Aug. 1 Collected all accounts receivable.Sept. 1 Signed long-term note to receive 8,120,000 NGN cash.Oct. 1 Bought inventory for 20,120,000 NGN cash.Nov. 1 Bought land for 3,120,000 NGN on account.Dec. 1 Declared and paid 3,120,000 NGN cash dividend to parent.Dec.31 Recorded depreciation for the entire year of 2,060,000 NGN.The U.S dollar ($) exchange rates for 1 NGN are as follows:August 1, 2019December 31, 2019February 1, 2020May 1, 2020June 1, 2020August 1, 2020September 1, 2020October 1, 2020November 1, 2020December 1, 2020December 31, 2020Average for 2020The subsidiary acquired the inventory on August 1, 2019, and the land and building in 2013. It issued the common stock in 2011. During2020, the following transactions took place:a.NGN 16,42011,2004,12041,200(20,600)NGN 52,340b.PositiveNGN 1 =1 =Remeasurement gain1 =1 =1 =1 =1 =1 =1 =1 =1 =1 =1 =$0.00600.00540.00740.00760.0078translationadjustment0.00800.00820.0086Notes payableCommon stockRetained earnings0.00880.00900.00920.0094a. Assuming the NGN is the subsidiary's functional currency, what is the translation adjustment determined solely for 2020?b. Assuming the U.S.$ is the subsidiary's functional currency, what is the remeasurement gain or loss determined solely for 2020?(Input all amounts as positive. Enter amounts in whole dollars.)0.01080.0098Answer is complete but not entirely correct.NGN 20, 24021,40010,700NGN 52, 3401,908$ 229,250

Translation is the process through which the financial statements of a foreign subsidiary are…

Rolfe Company (a U.S.-based company) has a subsidiary in Nigeria where the local currency unit is the naira (NGN). On December 31, 2019, the subsidiary had the following balance sheet (amounts are in thousands [000s]: Cash Inventory Land Building Accumulated depreciation NGN 16,420 11,200 4,120 41,200 (20,600) NGN 52,340 Notes payable Common stock Retained earnings NGN 20, 240 21,400 10,700 NGN 52,340 The subsidiary acquired the inventory on August 1, 2019, and the land and building in 2013. It issued the common stock in 2011. During 2020, the following transactions took place:

Rolfe Company (a U.S.-based company) has a subsidiary in Nigeria where the local currency unit is the naira (NGN). On December 31, 2019, the subsidiary had the following balance sheet (amounts are in thousands [000s]: Cash Inventory Land Building Accumulated depreciation NGN 16,420 11,200 4,120 41,200 (20,600) NGN 52,340 Notes payable Common stock Retained earnings NGN 20, 240 21,400 10,700 NGN 52,340 The subsidiary acquired the inventory on August 1, 2019, and the land and building in 2013. It issued the common stock in 2011. During 2020, the following transactions took place:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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